Credit Suisse posts first net loss since 2008

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Credit Suisse, Switzerland's second largest bank, said on Thursday that it recorded a net loss of 2.42 billion francs for 2015, weighed down by “substantial charges” it said did not reflect its underlying business performance.

The massive loss, the first for the bank since 2008 and higher than most analysts expected, compares with a net profit of 1.87 billion francs in 2014.

Goodwill impairment of 3.8 billion francs, litigation costs of more than 1.3 billion francs and restructuring costs of 355 million francs accounted for some of the red ink.

The goodwill writedown related to an acquisition of a US investment bank Donaldson, Lufkin & Jenrette back in 2000.

In October, after four months at the helm of Credit Suisse, chief executive Tidjane Thiam announced 5,000 job cuts at the bank as part of an overhaul aimed at putting more focus on wealth management and raising new capital

The bank recorded a loss of 5.83 billion francs for the fourth quarter, reflecting some of the changes made in its operations.

“Given the particularly challenging environment we face, we decided in the fourth quarter to accelerate the implementation of our cost savings program across the bank,” Thiam said in a statement.

“We have identified and actioned initiatives that will permanently reduce our fixed cost base, resulting in cost savings of 500 million francs per (year) on a full year run-rate basis.”

But Thiam added that market conditions in January remained challenging.

“We expect markets to remain volatile throughout the remainder of the first quarter of 2016 as macroeconomic issues persist.”

Investors reacted negatively to the Credit Suisse report, driving the bank's share price down more than ten percent in Thursday morning trading.

At noon the stock was trading at 14.73 francs after opening at 15.34 francs.